BATON ROUGE, LA – State Farm Mutual Automobile Insurance Company, the largest insurer of autos in Louisiana, is raising its overall rate level in the state an average of 3.4 percent effective Feb. 17, 2014, according to a news release from the company.
After the rate change is implemented, State Farm's overall rate level in Louisiana will still be slightly lower than it was six years ago, the company said.
State Farm spokesman Gary Stephenson said the primary reason is the cost of claims repair.
"The costs for vehicles insured is trending slightly upward, along with repair materials and parts, along with repair rates," he said. "The overall trend requires an adjustment in premium rates."
Another reason Stephenson cited is litigation, saying Louisianans sue each other over auto accidents more than any other state.
"There is a very high litigation ratio in Louisiana - numbers of lawsuits for accidents compared to the number of accidents," he said. "Millions of dollars paid on lawsuits in Louisiana every year are part of the 'costs' that are covered by insurance, and that directly influences the liability insurance costs in the state."
Premiums for liability, med pay, collision and comprehensive coverage are increasing. Comprehensive coverage pays for losses from such perils as theft, storm damage, fire, vandalism and glass breakage.
Overall premium changes for individual motorists will vary depending on factors such as the coverage they carry, the discounts for which they qualify, where they live, the kind of car insured, who drives it and how much it is driven.
About one in every three cars insured in Louisiana is insured by State Farm.